Why cities are breaking up big blocks

It’s a time of reckoning for cities looking to keep central business districts relevant.

Bustling commercial centers built on decades-old habits have undergone massive change in recent years. Evolving business needs and the way people think about health, wellness and their work-life balance are upending some of the time-tested draws of the CBD.

One way cities are responding: breaking up blocks of concrete offices to create pleasant mixed-use districts that foster people-centric, connected communities. From Britain to Australia, Singapore to New York, cities are finding ways to improve and diversify the fabric of their neighborhoods.

Take One Bangkok in Thailand. The sprawling district in the country’s capital city aims to include new offices, a retail quarter, luxury homes and hotels, an entertainment arena, and plenty of open green spaces all within easy reach of the public transportation system.

“It’s been designed as the ultimate urban focal point, with an emphasis on wellness, sustainability, and smart technology,” says Phil Ryan, Director of City Futures, Global Insight at JLL. “This is the kind of integrated business and residential district that we’re seeing start to crop up in cities around the world.”

It’s a counter to the ageing infrastructure, obsolete office stock and peoples’ desire for shorter commutes that are adding to challenges for traditional CBDs, according to JLL’s Future of the Central Business District Report.

“CBDs need to transform from primarily places of work towards being vibrant amenity rich, multi-purpose destinations with a greater focus on ESG,” says Ryan.

For cash-constrained local governments, improving transit connectivity is key, but can mean exploring a raft of financing options.

For instance, the successful redevelopment of the former Battersea Power Station in London “was dependent on the infrastructure, so a public/private tax increment model was used to fund the Tube extension and new station,” says Ryan.

The public sector borrowed against the value that came from developing the land, with repayment financed over a period of 25 years by the private sector, using additional “enterprise zone” business rates and contributions secured from developers.

Elsewhere, the constraints of the specific site, local governance regulations and lack of a big picture overview can all hamper progress.

“Communication plus careful financial and physical planning are vital to avoid missed opportunity,” says Ryan. “The people in charge of building transport infrastructure must be aligned with their real estate colleagues.”